No Way, José? - A Case for GM Food

GMO technologies touch upon business, social, even religious issues. Debate has been heightened by globalization, raising conflicts within the World Trade Organization and pitting the European Union countries against the US. This case by Benoît Hochedez, graduate student at the University of California at San Diego, under the supervision of Professor Philip M. Parker, the Eli Lilly Chaired Professor of Innovation, Business and Society at INSEAD, considers whether the introduction of genetically modified foods represents the "single greatest failure in the history of capitalism" or "a responsible way to enhance agricultural crop productivity for now and the future"?

by Philip Parker
Last Updated: 23 Jul 2013

"European farmers don't want GMOs. No need to discuss that!" It may not take much for environmental activist José Bové to take a stand but anyone raising the issue of genetic modification is unlikely to see him retain his sang-froid for long. So it proved at an EU meeting on the issue when Bove's response to the opening of the discussion was to walk out, leaving no doubt about the position of European farmers. This case by Benoît Hochedez, graduate student at the University of California at San Diego, under the supervision of Professor Philip M. Parker, the Eli Lilly Chaired Professor of Innovation, Business and Society at INSEAD, seeks to air and debate GM issues in full.

Much has been made of antipathy toward genetically modified organisms with disparaging references to "Frankenfoods," angry protests and the destruction of field trials. Yet certain advantages of GM foods become clear when the evidence is examined. In 1950, world wheat yields averaged 770kg per hectare - by 1986 they had almost tripled to 2,160kg per hectare. Wheat and rice production increased by about 75% in the developing world as a whole between 1965 and 1980. The benefits to be derived from the release of a GMO range across the spectrum of plant and animal production include pest control, increases in productivity, improving the environmental impact of production by reducing herbicide and pesticide usage, and reducing methane emissions from ruminant animals (cattle, sheep, goats, deer).

Central to this debate is the conduct of the main protagonists in business. In order to build its market position and enhance its research resources, the agribiotech industry has consolidated, gaining considerable political power and financial strength. Yet it has become clear that certain sectors of society feel that increasing business power should be commensurate with social and environmental responsibility. Does neglect of social values and negative media coverage pose threats to such powerful international groups as Monsanto and Novartis. Does their continued misjudgment of the severity of the situation pose threats to these companies in the future? Or perhaps not? Some have likened the anti-biotechnology movement to the anti-nuclear movement in scope and tactics.

Governments have taken up the issue of GM resulting in educational campaigns, food labeling proposals, and heated international trade discussions between the US and Europe on the importing of GMOs and seeds. As other countries get involved the issue is starting to have a global dimension. This case examines in detail the business opportunities and threats for the agribiotech industry including the implications of the globalization trend, population growth, ethical issues, environmental problems in agriculture, and the strategic consideration of information and communication management.

INSEAD 2003

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